Q: Hi there,
What’s your thoughts on the proposed deal to sell AY to Energy Capital Partners. Seems like price is too low will shareholders balk at this?
Ok thanks.
What’s your thoughts on the proposed deal to sell AY to Energy Capital Partners. Seems like price is too low will shareholders balk at this?
Ok thanks.
5i Research Answer:
It has been long rumoured, and the price of AQN hasn't reacted to the news. We will give AQN points for indicating its intention to sell assets and then following through. The debt reduction will help the balance sheet, but there will be an offsetting drop in earnings power. The price is likely to disappoint some but is within the range previously discussed. The stock was down last year partially because valuation ranges being discussed were brought down somewhat already. But with a price below the curret market price, shareholders may well just say, 'forget it'. With AQN owning 42%, however, the possibility of other buyers becomes more limited.